The results of examinations taken by 1.2 million schoolchildren will be delayed following a catalogue of blunders, the Government has admitted.

All test papers sat by 11 and 14 year olds earlier this year were due to be returned to primary and secondary schools in England next week - with nationwide results published in August.

But Ed Balls, the schools secretary, has now conceded they would be held up because of "technical issues".

An independent inquiry has now been launched into the fiasco by Ofqual, the independent qualifications regulator.

The marking of Key Stage 2 and Key Stage 3 tests is being administered by ETS Europe - an off-shoot of an American firm brought to manage exams for the first time this year. The five year deal was worth £156m.

But senior examiners have complained of a catalogue of errors surrounding the firm's handling of the tests.

They said that papers were not delivered on time, an on-line system being used to register results failed to work and training was late or inadequate.

Emergency marking centres have now been set up - working seven days a week - in an attempt to clear the backlog.

But the Government has now admitted that papers will not be marked on time.

Mr Balls said just 90 per cent of Key Stage 2 marks were ready, while the Key Stage 3 position was "less close to being complete".

In order to ensure an orderly release of results, it has been decided to hold the Key Stage 2 results back to July 15, when "the vast majority of marking" will be finished, he said.

But he said that Key Stage 3 marking is expected to take longer, although he insisted schools would receive them before the start of the summer holidays in late July.

Every year, 1.2m pupils aged 11 and 14 sit exams in English, mathematics and science, which are seen as a key barometer of standards at the end of primary school and half-way through secondary school.

The latest admission - which comes just two weeks after ministers insisted exams would not be delayed - was branded an "extraordinary balls up".

Fears were also raised that the quality of marking would suffer, with some children given the wrong scores - a charge denied by the Government.

David Laws, the Liberal Democrat children's spokesman, said: "The marking of key stage tests this year has clearly been a complete and utter shambles.

"It is frankly scandalous that there has been this degree of incompetence in marking tests which are considered by the Government to be of such importance to schools. Teachers and children deserve much better. I will now be calling upon him [Ed Balls] to return to Parliament on Monday to account for this extraordinary balls up."

Nick Gibb, the Tory shadow schools minister, said: "There was a clear lack of due diligence taken when awarding this contract. It is very distressing for the children concerned and will simply add to the pressure they face as the Summer holidays approach."

The Government's National Assessment Agency described the delay as "a serious failure" on the part of ETS Europe.

"The main causes of this delay are the lateness in the completion of the marking process and a series of technical issues," it said. "This is a serious failure by ETS Europe for which we apologise to schools, pupils and parents. We understand that this delay will inconvenience many schools, and we share their frustration and disappointment."

An ETS spokesman said : “ETS Europe regrets the inconvenience caused by the delay in issuing the national curriculum test results to schools. Our priority is to ensure that all of the tests are marked to a high standard so that schools will receive accurate results to better serve the needs of their pupils.

“We will report the vast majority of the test results one week late, on July 15, with a small number of Key Stage 3 results to follow as soon as possible.

“We note Ofqual’s announcement and welcome an objective review of the facts regarding the issuing of results this year. We will of course co-operate fully.”